Jeth Soetoyo - Crypto Innovation with Collaborative Regulations - TOKEN2049 Singapore 2025

Hi everyone. It's really nice to be here. Uh my name is Jeff. I'm the I was the founder and CEO of Pintu, an Indonesian exchange before starting um and becoming CEO of CFX, the world's first uh crypto bors. And today in my presentation, I'm going to share a little bit about how Indonesia, a little known country around the world, took an innovative approach to regulation and created a foundation of trust where crypto innovation and product innovation has thrived.

So, I'll start the presentation with sharing a little bit about Indonesia. Um, Indonesia has actually risen a lot in crypto adoption between 2022 and 2025. Um, Indonesia has climbed the rankings from seventh place in the world to number to uh sorry from tw 20th place in the world to seventh in the world in terms of crypto adoption. And this has been on the back of a number of factors which I'll share about next. Number one, the growth of internet penetration.

So between 2011 and 2023, Indonesia's internet penetration has um increased by almost a five-fold increase. And you can also see in the amount of mobile cellular subscription where between those years, Indonesia has risen 25% while the US has risen 18%. And this has driven a large part of the market which is predominantly um middle-aged um users to come into um adopting cryptocurrencies. And on the back of this, Indonesia has taken a very interesting approach. They've installed a three-pillar market structure, the first in the world on how to regulate and how to support the the the market for cryptocurrencies.

Where in Indonesia, you have the role of a bors, you have the role of a clearing entity, and you have the role of a custodian entity, which is quite similar to what traditional financial markets have seen. So the role of the BORS CFX is they support the reporting of data from the whole industry and um and also the order book for futures and per trading for the whole industry in Indonesia. While the clearing entity supports the settlement and reconciliation of transactions and trades in Indonesia as well as managing fiat for all the entities in Indonesia and the custodian supports the custody of assets in Indonesia. So within that framework, Indonesia is regulated by OJA which is the SEC equivalent uh which regulates all financial market activities in Indonesia. Under that you've got three pillars which is CFX um KKI the clearing entity and ICC the custodian.

And within within that framework, we have about 24 members today who are fully licensed in Indonesia who acts as uh local exchanges serving and customers to buy and sell cryptocurrencies. You may ask why this is the case. Why did Indonesia take this approach in regulating and uh creating the market structure? So as you all know in around 202022 a lot of failures in crypto exchanges happened with the hack of FTX um and and the loss from ZipMax as well as a lot of other entities. Indonesia was concerned that the centralization of roles uh within centralized exchanges became a key risk in the market that could that could cause losses for end users.

And so that's why they they sort of separated out the accountability and the roles between the different uh the different entities to reduce the risk and increase the trust within the ecosystem. And what so what's the result from all of that? What we've actually seen is that trust becomes the bedrock for growth. And we've seen this in numbers as well in Indonesia and around the world. We've seen growth in regulated um markets and local regulated markets outpacing growth in unregulated markets.

Trust becomes the key for institutions for larger players to invest, to trade, and to participate in the crypto economy. And we do believe that trust and compliance will be one of the key drivers for growth going forward. So what does that mean for us? We think that the next wave of crypto uh and product innovation will come from this. So what we've done actually in the last one year, we've launched perpetual products under this framework and we've seen a large growth on that um on that product.

We also see going forward that innovation will come from the use cases around stable coins. We also see that real real world asset tokenizations will become big in the future. We do believe that tokenization of financial products of digital products will become a huge factor in broadening up the economy around cryptocurrency to to to blur the lines between borders and to to globalize uh local products. We also see ICOs becoming a key uh a key product in the future where CFX's role as the Boris could facilitate ICOs in the future together with the other market participants. And we also see crypto financing become a big thing uh in in CFX and in our ecosystem today.

Crypto financing is is not a thing in Indonesia, but we do think that going forward utilizing and monetizing idle assets could be a way to deepen liquidity in Indonesia as well as in our ecosystem. So what is the takeaway I think from from all of this? You know, Vitalik once mentioned that in the long run, security is the ultimate scalability and we also do believe in that phrase. We believe uh that within the trillemma of decentralization, security and scalability where you have to pick two out of the three. We believe that decentralization and security will will become the foundation for scalability.

And the reason being that at the end of the day money and capital will flow towards wherever uh market or wherever platform is the most secure because at the end of the day I think our industry its values and its principles lie on trust and and so that's why within CFX and I think this is where it ties back to how the Indonesian government and the regulators ers approach this trilmma is by separating out and decentralizing the roles of centralized exchanges. Separating out the roles of a clearing, the custody and the exchange from traditional players and this becomes the bedrock for decentralization and security within our industry. So in in in and what does that mean for Indonesia, right? I think what that means is it's is that it becomes the ideal gateway for secure and scalable opportunities. Supportive regulation within Indonesia allows for foreign individuals, entities to own trading firms and to enable participation in um in in our ecosystem.

We've also seen FDI uh becoming a large factor in Indonesia in 2024 and the growth of crypto investors in Indonesia has 4xed outpacing a large number of uh global countries around the world. And with this fast growing digital foundation and significant leap in crypto adoption, I think Indonesia stands as the next um hub for crypto investors around the world on the back of collaborative regulation, trust and compliance, product innovation, and strategic collaborations. So here's a slide that I'd like to share with you and to call to action. Um, CFX and our group of companies are really open around uh having conversations with everyone here um and and that falls within the scope of product innovation uh liquidity and knowledge transfer. I hope my presentation today is helpful for everyone and can open up opportunities for you guys to look into our little known country and also becomes an example for innovative regulation around the world.

Uh thank you so much for your time.